Waiver of pre deposit - quantum of amount of pre-deposit ordered by the tribunal - Export benefit by way of Duty Entitlement Pass Book - Whether the Tribunal ought to have waived the predeposit of duty and penalty under Section 129E of the Act as calling upon the Appellant to deposit the same or part of the same would cause undue hardship to the Appellant in view of financial difficulty of the Appellant - Held that:- case of the Revenue in nutshell is that the appellants have inflated the value .....

irms. Though the appellants had specifically denied the relationship with the said three firms, it was found from the material on record that there were various bank transactions between the appellants and/or their subsidiaries and the said three firms. From the samples taken from the consignments of the said three firms and the market enquiry, it was found that the Exporter had declared inflated value of motor parts and availed undue DEPB credit and on the said basis DEPB Scripts were obtained .....

R. Gavai, J.):- 2 The facts in brief giving rise to the present appeals are as under: (a) It is the case of the Revenue that the Appellant-firm (hereinafter referred to as 'Exporters') had made export of certain goods declaring the same as automobile parts such as door bidding, fuel pump fitting, front suspension bush, oil seal etc. and availed export benefit by way of Duty Entitlement Pass Book ( DEPB ) Scheme. It is further the case of the Revenue that the Exporters-appellants against .....

applicants-firms were also exporting similar goods, investigation started and it was found that there are many transactions between the present appellants and M/s S.S. Enterprises, M/s Neel Impex and M/s Agarwal Traders. The appellants denied their relationship with the aforesaid three firms. However, since the Revenue had a material to establish that there were transactions between the appellants and the said three firms, the samples were taken from the consignments of these three firms and ma .....

rds were destroyed in a fire which took place in their godown . Mr. Goyal has denied their relationship with M/s S.S. Enterprises, M/s Neel Impex and M/s Agarwal Traders. Mr. Goyal disclosed that the exported goods were procured from the open market from the traders and the procurement was looked after by one Mr. Sanjay who thereafter left the job . During investigation, the Exporter firms failed to produce any documentary evidence regarding procurement of the large quantity of parts which were .....

Being aggrieved thereby, appeals came to be preferred before the learned CESTAT . Along with the appeals, an application for exemption for pre-deposit came to be filed. The said applications were partly allowed. The learned CESTAT directed the appellants to deposit 50% of the duty and 10% of the penalty in each case levied as a pre-condition for hearing the appeals. Being aggrieved thereby, the present appeals. 3 Mr. Bharucha , the learned Senior Counsel appearing for the appellants submit that .....

ection 28 of the Customs Act. The learned Senior Counsel submits that the Authorities are seeking to recover the duty payable by the importers from the appellants which is not permissible in law. The learned Senior Counsel submits that the Division Bench of this Court in the case of Commissioner of Customs (EP) Vs. Jupiter Exports [2007 (213) 614 ( Bom .) has held that in view of the provisions of Section 28 it is not permissible to recover the duty from an Exporter. The learned Senior Counsel s .....

ch is not permissible in law. The learned Senior Counsel further submits that the learned Tribunal has relied on the judgment in the case of Hindustan Lever Limited Vs. Commissioner of Customs (EP), Mumbai [2012 (281) ELT 241 (Tri-Mum) and has taken contrary view than the view taken in the present case. He submits that, whereas the learned Tribunal has relied on the judgment of the Division Bench of this Court in the case of Commissioner of Customs (EP) Vs. Jupiter Exports (supra), in the afores .....

, is issued to the appellants. It is further stated that an enquiry ought to have been completed within a period of 30 days or at the most within 90 days. It is further submitted that in the present case the matter is sought to be re-opened almost after four-to-five years and as such is not permissible in law. The learned Senior Counsel submits that perusal of the material on record would reveal that various documents which are sought by the present appellants were not supplied to them. It is, t .....

the order directing pre-deposit. He submits that while considering an application for pre-deposit, the learned Tribunal is required to take into consideration only three factors namely prima facie case, undue hardship and interest of the Revenue. He submits that the learned Tribunal has rightly taken into consideration all these factors while passing the impugned order. He submits that taking into consideration all the factors, the learned Tribunal has directed to deposit only 50% of the duty a .....

ht to have waived the predeposit of duty and penalty under Section 129E of the Act as calling upon the Appellant to deposit the same or part of the same would cause undue hardship to the Appellant in view of financial difficulty of the Appellant ? " 7 Admit on the aforesaid substantial question of law. We proceed to hear and decide the same finally by consent of the parties. 8 All these appeals arise out of the order passed by the learned CESTAT dated 4th December 2013 thereby partly allowi .....

t in the case of Indu Nissan Oxo Chemicals Industries Vs. Union of India, reported in 2008 (221) ELT 7 (SC) . The Apex Court in the case of Indu Nissan Oxo Chemicals (supra) interpreted the provisions of Section 129E of the Customs Act. Paragraphs 14,15 and 16 of the said judgment thus read as under: "14. Two significant expressions used in the provisions are " undue hardship to such person" and "safeguard the interests of revenue". Therefore, while dealing with the appl .....

Karnataka and Ors . (AIR 1994 SC 923) that under Indian conditions expression "Undue hardship" is normally related to economic hardship. " Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 16. For a hardship to be 'undue' it must be shown that the particular burden to have to observe or perform the requirement is out .....

ering the cases of similar units namely M/s S.S. Enterprises, M/s Neel Impex and M/s Agarwal Traders, it was found that the exported goods were overvalued to get undue DEPB benefit. It was further found that the appellants-firms were having transactions with the aforesaid three firms. Though the appellants had specifically denied the relationship with the said three firms, it was found from the material on record that there were various bank transactions between the appellants and/or their subsi .....

India is concerned, at least prima facie, we are of the view that the said contention is not supported by material on record. The material placed on record would reveal that not only the show cause notices were issued to the appellants, but also the summons were issued to Shri R.K . Goyal under the provisions of Section 108 of the Customs Act, 1962. However, the said Mr. Goyal stated that all the records were destroyed in a fire which occured in their godown . Mr. Goyal also denied to have relat .....

rties. In that view of the matter, we refrain ourselves from considering the rival contentions on merits. We will restrict ourselves only to find out as to whether the view taken by the learned Tribunal is in consonance with law laid down by the Apex Court and as to whether the learned Tribunal has rightly applied the aforesaid three factors while deciding the application for pre-deposit. 13 Insofar as the contention regarding the enquiry to be conduced within a period of 30 days or 90 days is c .....

e, serve notice on the person chargeable with duty or interest which has not been so levied or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice." 14 Perusal of the said provisions would reveal that in case of collusion or any willlful mis -statement or suppression of facts, the show cause notice should be issued to the assessee within a period of 5 years and as s .....

judgment of the Division Bench of this Court in the case of Commissioner of Customs (EP) Vs. Jupiter Exports (supra), is concerned, it is relevant to refer to paragraph-23 of the said judgment in which the Division Bench has held that the duty under Section 28 could only be recovered from "a person chargeable to duty" and that such a person would be the importer in the case of import and the exporter in the case of exports. The Division Bench held that the import duty cannot be recover .....

d against a person who had obtained a license by fraud or misdeclaration in accordance with law. 17 Perusal of the material on record would reveal that it is the case of the Revenue that the DEPB credit was obtained by the appellants by fraud so as to avail DEPB credit on the inflated rates so that resultantly DEPB Scripts are available at inflated rates, which can be sold in the open market. In that view of the matter, in our view, the aforesaid judgments would rather support the case of the Re .....